Despite the fact that life insurance will basically be in charge of delivering an insured sum to your beneficiaries in the event of your death. The insurance industry has several alternatives that may provide you with other benefits when you make sure to offer more attractive and complete plans.
Below we detail the characteristics of the best known:
Temporary Life Insurance
There are basically two types of Life insurance in this modality. The term of temporary corresponds to the fact that these plans will provide coverage for a specified period of time. And once this has arrived, the plan will be canceled. The relevant thing is that at the end, the policy will be signed again. This indicates that you must meet the insurability requirements such as age and good health.
+ Temporary 1 year (Life insurance renewable per year):
This is an insurance that is contracted for one year. Upon completion you can renew it but there may be restrictions in this regard. If what you are interested in is having economic protection and only for a few years, this is a good option for that case.
The disadvantages of this renewable insurance per year:
- Its price, being related to your age, will rise with each annual renewal.
- If you do contract a disease, the insurer can deny the automatic renewal if it deems it convenient (or failing that, raise the cost considerably).
+ Temporary Insurance at the age reached or a specified term
This insurance is contracted for a predetermined term. Generally it can be from 5, 10, or until you reach a certain age. For example 65 years.
This insurance is simple. If you die, your beneficiaries will receive the amount you decided to contract, and a Level Premium will be charged during the term. In other words, there will be no price changes due to the increase in age.
Some cons are:
- If you do not die within the protection period, there is no type of premium recovery.
- If you want to continue protected, even if you get sick at the end of the contract, it will not be possible due to the fact that it is a contract with a specific term.
This insurance is for you, if:
- You want to pay a fixed and accessible amount throughout the life of the policy.
- You want to guarantee coverage for a previously defined term and at an affordable price.
- You need to be clear about what you will pay monthly and annually.
- If you are looking to cover a possible death without confusing and expensive extra coverage.
Life life insurance.
It will allow you to be insured until you decide so for the insurer it can be a life plan. You will be covered for practically your entire life, since the policy usually covers up to 99 years.
What’s more; This insurance generates a savings fund plus returns, so that in the event of canceling the policy, the redemption value plus the returns generated can be withdrawn. The longer you are insured, the higher the salvage value and the returns. Therefore, in addition to giving you protection, it will allow you to recover part of what you paid.
Disadvantages of life insurance:
- They are plans in which the Premium (insurance cost) will be higher than those you will pay for an equal insured sum in a temporary plan.
- If you plan to be insured for a short time, the values generated will be very small. They will even begin to be generated from the 2nd year of validity and will grow little by little.
Life insurance is a good idea if:
- You want your paid premiums to generate a return over time, thinking about the possibility of recovering them at some point.
- You want assurance that you or your beneficiaries will collect the insurance at some point. Well, you decide until when you want to be insured
- You want to be protected for all the years of your life.
Endowment life insurance
This insurance contains an element of savings in case of survival. This saving; It is delivered at the end of the established term. That is to say; that in case you do not die, you will receive the corresponding sum stipulated in your policy. Saving will generate returns for as long as you have your insurance.
Disadvantages of these types of insurance:
- They are expensive compared to other life insurance because you have to cover the death protection plus the amount allocated to savings.
- It is not clear what percentage of the premium goes to death protection and what goes to savings.
- The returns on the percentage earmarked for savings are usually not very profitable. Sometimes; it would be better to make investments on your own with other financial tools. You must remember that the value of a plan of these is protection and saving a complement
Who is endowment insurance for?
- For people who do not have the habit of saving, it is a way to “force” themselves to do so.
- People who want to be sure that they will receive an insured amount at the end of the term of the policy.
- For those who want to have protection for their family and invest money at the same time.
- An excellent example of these plans are educational insurance or “Segubecas”. They are actually endowment insurance aimed at paying for University education.
On our website we have pricing and more details of some of these plans. HERE